COVID PREVENTION IS COSTLY.

An ounce of prevention, Canadians once all knew, is worth a pound of cure. For those of the metric persuasion: there were 16 ounces in a pound. So the prevention versus cure rate of return was very favourable: spend $1 on prevention, save $16 on cure. My guess is that the return is no longer quite so favourable in the prevention/cure trade-offs for COVID-19, however.

When it comes to COVID policy, we're doing both prevention and cure. We and lots of other countries are bankrolling the search for and eventual production of a vaccine (which is a sort of cure). And there are lots of encouraging signs that treatments are less intrusive and more effective than they were in March. Despite blustering reassurances from the U.S. president, however, COVID is still a serious disease not to be trifled with, especially by older people. There is no cure yet.

On the prevention side, we've obviously been doing a lot. It's not exactly clear how effective mask-wearing and handwashing are but they're not expensive or burdensome, especially after becoming a habit. And a safety payoff seems plausible, both for washer/wearers themselves and for people they come into contact with — or, at least, into the vicinity of.

But by far our biggest act of prevention has been lockdown. How big? Telling all but the most essential workers to stay home and not get closer than six feet to anyone but a small number of people in their designated “bubble” is a huge ask. What proportion of potential human interactions, from trivial to lifechanging, have been foregone since mid-March? Half? Three-quarters? Ninety per cent? It's hard to say.

How expensive has prevention been? Very. The true cost is the value of all these trillions (I'm guessing trillions) of prevented interactions, some of them commercial, most probably not. Attempting to measure them would be a fool's errand. Which doesn't mean some economist won't try. There are many estimates already of how much GDP has been lost. But of course GDP only measures a subset of the benefits we all — misanthropes excepted — enjoy from society. Despite what they say, not all the best things in life are free. But many good things clearly are, including the pleasure of other people's company.

Another common but imperfect measure of the costs of COVID is what it's doing to government budgets. Some of the damage so far has to do with the search for a cure. But most is because of the lockdown. TD Economics has just published a nice briefing — “Dollars and Sense: A Q&A on Fiscal and Monetary Policy” — that looks at some of the numbers resulting from the “bazooka of fiscal and monetary measures that occurred during the spring.” It starts with a chart that graphs quarterly changes in U.S. GDP against quarterly changes in personal disposable income from 1947 through 2020. For the first 72 years graphed, the two series move closely together. Then, when COVID hits, there is a “complete departure from past experiences.” The Canadian series are the same: GDP plummets, falling 41.5 per cent, but household disposable income skyrockets, rising 51 per cent. Both numbers are off-thecharts unique and so is their divergence.

Though some of the GDP collapse was voluntary, as people withdrew on their own, much of it, probably most of it, was from mandated lockdown. Which is what justifies the (also-record) 88 per cent jump in government transfers (via EI, CERB and other new programs) that accounted for most of the big increase in disposable income. Government having shut the economy down, government was obliged to at least partly replace the income its decision destroyed.

In an alternative universe where the welfare state had not emerged, government might have said: “OK, everybody. Tough it out and live off your savings for six months or a year.” But after eight decades of governments telling people spending is good for the economy, saving bad, that's not the universe we live in. Most people don't have savings that can get them through six weeks of no income, let alone six months. So government had to step in.

But how long can governments continue to outlaw the earning of income and replace it with moneys it either borrows or, with the help of sympathetic central bankers, prints? In terms of borrowing, TD says “the good news is that Canada is not alone when it comes to higher debt levels” — though knowing every other government in the world is running a big deficit, too, is not all that reassuring: does each individual lemming really take comfort in having company as it tumbles from the cliff? The rest of the good news? Canada “has a better starting position at the federal level relative to its peers.” Pity we can't just ditch that non-federal level!

In terms of influencing decision-makers, economists' gloomy but inevitably imprecise warnings that all this spending and borrowing will not end well cannot compete with pictures of people being wheeled into ICUs. But the costs of the lockdowns that are our chief form of prevention are immense and not ultimately sustainable. I wouldn't argue the prevention/cure arithmetic is now 16 to 1 rather than 1 to 16. But we do now know that prevention by lockdown is very expensive. It may make sense to move more of those resources — more, not all — into adaptation and treatment.